MSO Faces Historic Challenges

Symphony reduces size, adds concerts

The Milwaukee Symphony
Orchestra, Wisconsin’s largest cultural institution and one of America’s finest
orchestras, is in dire financial trouble. On Dec. 5, the MSO announced a
restructuring plan that will reduce the number of full-time musicians and
administrative staff, make deep cuts in benefits and the operating budget, and
pursue improved scheduling opportunities as it moves swiftly to become a permanently
sustainable organization.

“An immediate campaign
to raise $5 million is critical,”says
Mark Niehaus, president and executive director of the MSO. “We have
unprecedented internal alignment, and a community-wide fundraising effort is
under way, but right now the MSO is in real danger of shutting down.”

The prospect is
frightening. If the organization halts operations, staff might leave and
musicians scatter, making gearing up again difficult, if not impossible.
Everyone is doing what is necessary to make this work; as Niehaus points out,
“A controlled descent is much cheaper than the crash landing.”

“This is a critical
opportunity to save what decades of effort and investment have created,” says
Douglas Hagerman, MSO board chairman. “We can save the MSO, and we have a plan
to do that. Following the lead set by our musicians, we need everyone to
participate in order to avert a tragic loss for the cultural life of our city
and our region.”

In the last 11 years,
the musicians have acquiesced to financial concessions seven times. Scott
Kreger, a bass player and chairman of the orchestra’s negotiating committee,
said, “The problem is not with the musicians, but now it’s on everyone’s
shoulders to preserve the orchestra at all costs. It would be a disaster for
the Milwaukee Symphony to close its doors.”

Four serious obstacles
have long stood in the way of the MSO’s financial success: the MSO’s tenant
relationship with the Marcus Center, an inadequate endowment, a significant
decline in the annual United Performing Arts
Fund allocation to the MSO and a pension obligation.

The Marcus Center plugs
in the MSO, Florentine Opera, and Milwaukee Ballet around touring Broadway
shows that it brings in as a revenue source. Under the new plan, the orchestra
will perform 27 weeks (up from 23) in the Marcus Center; more dates in the hall
means more earned income for the orchestra. “The MSO is instrumental to the
overall success of the Marcus Center,” says Paul Mathews, the Marcus Center’s
general manager. “The MSO serves as a pillar to the broader performing arts
community in Milwaukee, which is why we’re all willing to make some sacrifices
to ensure the MSO can continue on.”

Detrimental to the MSO’s
survival is an inadequate endowment: the annual draw on the current, restricted
endowment of $17 million is less than $800,000, and the unrestricted portion is
barely sufficient for cash-flow needs throughout the year. The endowments of
peer orchestras in the Midwest are far healthier: Cincinnati, $140 million; St.
Louis, $116 million; Indianapolis, $84 million; and Detroit, $54 million.

UPAF
was meant to act as an endowment for the cornerstone arts groups of Milwaukee.
As an unintended
consequence of expanding the campaign’s beneficiaries, in the past 10 years the annual UPAF allocation to the MSO has dropped
from $3.6 million to $2.3 million.

If
that’s not enough, the MSO is obligated to a pension plan that was frozen in
1996. Because of the economic downturn and historically low interest rates, the
MSO must make cash payments of just under $1 million a year to keep the plan
funded. Employees who joined the organization after 1996 don’t participate in
this pension.

Artistically, the
orchestra has never sounded better. The precision, intelligence, and maturity
of Music Director Edo de Waart complement the exceptional talent of the
musicians. To cut costs, the MSO has reduced the number of orchestra personnel
this season by 11%; next season, an agreement in principle exists that the MSO
will excise a further $1.2 million through orchestra attrition. De Waart has
agreed to a 10% cut in his weekly remuneration and has shortened his residency
from 12 weeks to 8.

Reductions in players
affect the orchestral repertoire. While the muscular works of the late Romantic
era have been staples of the MSO, the orchestra and audience will become
familiar with smaller-scale compositions; De Waart must make compelling
programming choices that both satisfy current subscribers and attract new ones.

Under tight financial
conditions, a vacancy in the orchestra may not entice the best players, and,
without competitive compensation, the orchestra may have trouble keeping the
best musicians here in Milwaukee. Reducing the administrative staff’s budget
hinders marketing and development efforts. It will take complete buy-in on the
part of the board, donor community, administrative staff, and musicians to make
this change a success.

Milwaukee is a vibrant
city. What sets it apart is the exceptional cultural heritage present in the
MSO and the other cornerstone arts organizations here in town. It is impossible
to imagine Milwaukee without its largest artistic ensemble.

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